five-20211030

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(mark one)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 30, 2021.

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35600

Five Below, Inc.

(Exact name of Registrant as Specified in its Charter)


Pennsylvania						75-3000378
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

701 Market Street
Suite 300
Philadelphia
Pennsylvania						19106
(Address of Principal Executive Offices)						(Zip Code)

(215) 546-7909

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	FIVE	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of December 1, 2021 was 56,025,386.


INDEX

PART I - FINANCIAL INFORMATION		Page
Item 1.	Consolidated Financial Statements (unaudited)	4
	Unaudited Consolidated Balance Sheets as of October 3 0 , 2021, January 30, 2021 and October 3 1, 2020	4
	Unaudited Consolidated Statements of Operations for the Thirteen and Thir ty -Nin e Weeks Ended October 30 , 2021 and October 3 1, 2020	5
	Unaudited Consolidated Statements of Shareholders' Equity for the Thirteen and Thi r ty-Nine Weeks Ended October 30 , 2021 and October 3 1, 2020	6
	Unaudited Consolidated Statements of Cash Flows for the Thirty-Nin e Weeks Ended October 30 , 2021 and October 3 1, 2020	8
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

FIVE BELOW, INC.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)


	October 30, 2021		January 30, 2021		October 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	86,753	$	268,783	$	117,045
Short-term investment securities	224,563		140,928		96,749
Inventories	521,107		281,267		430,200
Prepaid income taxes and tax receivable	24,013		6,350		18,090

Prepaid expenses and other current assets	77,480		58,085		50,194
Total current assets	933,916		755,413		712,278
Property and equipment, net of accumulated depreciation and amortization of $340,637, $278,019, and $260,888, respectively.	728,319		565,351		522,214
Operating lease assets	1,151,632		975,862		928,739


Other assets	9,585		18,144		12,265
	$	2,823,452	$	2,314,770	$	2,175,496

Liabilities and Shareholders’ Equity
Current liabilities:
Line of credit	$	—	$	—	$	—

Accounts payable	253,817		138,622		237,647
Income taxes payable	811		2,025		1,031
Accrued salaries and wages	28,697		43,445		22,164
Other accrued expenses	167,468		108,504		99,489
Operating lease liabilities	162,809		143,074		136,513

Total current liabilities	613,602		435,670		496,844

Other long-term liabilities	1,536		1,048		1,918
Long-term operating lease liabilities	1,137,658		967,255		922,784
Deferred income taxes	37,407		28,911		4,408
Total liabilities	1,790,203		1,432,884		1,425,954
Commitments and contingencies (note 6)
Shareholders’ equity:
Common stock, $0.01 par value. Authorized 120,000,000 shares; issued and outstanding 56,025,753, 55,935,237, and 55,866,590 shares, respectively.	560		559		559
Additional paid-in capital	333,823		321,075		312,668
Retained earnings	698,866		560,252		436,315
Total shareholders’ equity	1,033,249		881,886		749,542
	$	2,823,452	$	2,314,770	$	2,175,496

See accompanying notes to consolidated financial statements.

FIVE BELOW, INC.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 30, 2021		October 31, 2020		October 30, 2021		October 31, 2020
Net sales	$	607,645	$	476,614	$	1,852,022	$	1,103,623
Cost of goods sold	405,283		325,514		1,218,472		792,223
Gross profit	202,362		151,100		633,550		311,400
Selling, general and administrative expenses	159,913		126,851		441,246		326,205
Operating income (loss)	42,449		24,249		192,304		(14,805)
Interest (expense) income and other (expense) income, net	(10,624)		(660)		(12,672)		(1,017)


Income (loss) before income taxes	31,825		23,589		179,632		(15,822)
Income tax expense (benefit)	7,648		3,164		41,018		(15,246)
Net income (loss)	$	24,177	$	20,425	$	138,614	$	(576)





Basic income (loss) per common share	$	0.43	$	0.37	$	2.48	$	(0.01)
Diluted income (loss) per common share	$	0.43	$	0.36	$	2.46	$	(0.01)

Weighted average shares outstanding:
Basic shares	56,023,961		55,851,780		56,001,437		56,004,072
Diluted shares	56,340,635		56,099,328		56,305,456		56,004,072

See accompanying notes to consolidated financial statements.

FIVE BELOW, INC.

Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands, except share data)


	Common stock	Additional paid-in capital	Retained earnings	Total shareholders’ equity

								Shares			Amount

Balance, January 30, 2021			55,935,237	$	559	$	321,075		$	560,252		$	881,886

Share-based compensation expense			—	—		5,695			—			5,695
Issuance of unrestricted stock awards			400	—		81			—			81
Exercise of options to purchase common stock			200	—		6			—			6
Vesting of restricted stock units and performance-based restricted stock units			92,914	1		—			—			1
Common shares withheld for taxes			(34,682)	—		(6,623)			—			(6,623)



Net income			—	—		—			49,596			49,596
Balance, May 1, 2021			55,994,069	$	560	$	320,234		$	609,848		$	930,642
Share-based compensation expense			—	—		6,457			—			6,457
Issuance of unrestricted stock awards			413	—		80			—			80
Exercise of options to purchase common stock			10,246	—		352			—			352
Vesting of restricted stock units and performance-based restricted stock units			17,339	—		—			—			—
Common shares withheld for taxes			(1,879)	—		(355)			—			(355)

Issuance of common stock to employees under employee stock purchase plan			2,090	—		443			—			443
Net income			—	—		—			64,841			64,841
Balance, July 31, 2021			56,022,278	$	560	$	327,211		$	674,689		$	1,002,460
Share-based compensation expense			—	—		6,707			—			6,707
Issuance of unrestricted stock awards			379	—		75			—			75
Exercise of options to purchase common stock			1,192	—		8			—			8
Vesting of restricted stock units and performance-based restricted stock units			2,834	—		—			—			—
Common shares withheld for taxes			(930)	—		(178)			—			(178)

Net income			—	—		—			24,177			24,177
Balance, October 30, 2021			56,025,753	$	560	$	333,823		$	698,866		$	1,033,249

FIVE BELOW, INC.

Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands, except share data)


			Common stock				Additional paid-in capital	Retained earnings	Total shareholders’ equity

	Shares	Amount
Balance, February 1, 2020				55,712,067	$	557				$	322,330	$	436,891	$

SEC Form 10-Q filed by Five Below, Inc.